Kemi Adeosun

Nigeria’s external reserves is expected to rise to a 54 months high of $45 billion this month following the conclusion of Federal Government’s $2.5 billion Eurobond this week.

The Eurobond, which the Central Bank of Nigeria (CBN) commenced last week with the announcement of its pricing last Thursday will be concluded on Friday this week.

According to the Finance Ministry, the $2.5 billion Eurobond which attracted a buying interest of $11.5 billion, comprised of a $1.25 billion 12-year series which comes with an interest rate of 7.143 percent and a $1.25 billion 20-year series which will bear an interest rate of 7.696 percent, both repayable with a bullet repayment of the principal upon maturity.

Although the purpose of the Eurobond issuance is to refinance domestic debts, proceeds of the bonds will among other things, accelerate accretions to the nation’s external reserves.

According to the CBN, the external reserves which stood at $39.3 billion at the beginning of 2018 had risen to $42.8 billion last week, a rise the nation’s apex financial institution said was driven by rising crude oil prices which touched $71 per barrel last month before retreating to $62 per barrel last week.

The CBN also attributed the rise to an upsurge in dollar inflows through the Investors and Exporters (I & E) window of the foreign exchange market which rose by 10 percent  last week to $789.9 million from $716.57 the previous week.